The spread of COVID-19 around the world and in the U.S. has impacted public entities and healthcare providers, creating uncertainties around continuity of operations and the cost to overcome the myriad challenges associated with the crisis. Considering this unprecedented event, the federal government is contemplating financial stimuli and emergency grants to assist both the public and private sectors, though the magnitude of such assistance is still unclear.
Emergency Expenditure Management
We know that the federal government has activated Federal Emergency Management Agency (FEMA) to assist with the response, and Department of Housing and Urban Development (HUD) has published guidance on the use of Community Development Block Grant (CDBG) funds to support eligible infectious disease responses. From experience working extensively with these funding sources, certain best practices lie at the core of federal regulations and guide the eligibility of funding in disaster/emergency situations. This document aims to outline the leading practices that entities should immediately consider following in their expenditures pertaining to the crisis at hand. Key areas to focus on are:
General Administration – Leading Practices
Document as much as possible (e.g., critical communications, photos of project sites/items purchased, changes to or enactments of certain internal policies for emergency response).
Establish a separate account for recording revenue and expenditures, and, if possible, by department.
Ensure each expenditure is recorded and referenced to supporting source documentation (bids, proposals, contracts, purchase orders, checks, invoices, etc.) that can be readily retrieved. If possible, try to make sure records are digital/searchable.
Designate a person/team with federal grant management experience to coordinate the emergency-related activities and accumulation of records.
Define key emergency timelines (typically, certain requirements are waived during the designated disaster/emergency period).
Create an emergency response documentation library that is easily navigable with a clear file structure to store and organize pertinent documentation.
Key Risk Areas to Avoid
Improper Processes: Even under emergency conditions, do not assume that improper processes (procurement, timekeeping, etc.) will be eligible for reimbursement.
Insufficient Documentation: A lack of adequate details or missing supporting documentation— can lead to a significant loss in eligible grant funding.
Unclear Accounting: With multiple funding sources potentially being made available, an eligible grant could be lost due to an inability to clearly articulate how different funding sources are utilized and that benefits are not duplicated.
Lack of Transparency: The lack of documentation and communication of operational decisions with relevant stakeholders at the state and federal level could jeopardize the reputation of your organization and could also lead to the loss of eligible grant funding.